Southwest Airlines Co. (NYSE:LUV) Receives Consensus Rating of "Hold" from Analysts

Key Points

• Analysts hold a neutral view: Southwest Airlines has a consensus “Hold” rating from 22 analysts, split among nine buys, nine holds, and four sells. The average 12-month price target is $49.56.
• Recent results exceeded expectations: Southwest reported quarterly EPS of $0.94 versus the $0.52 consensus estimate, while revenue rose 16.4% year over year to $8.72 billion.
• Institutional ownership remains high: Hedge funds and institutional investors own approximately 80.82% of the company. Southwest also pays a quarterly dividend of $0.18 per share, representing a 1.6% yield.

Southwest Airlines Co. (NYSE:LUV - Get Free Report) has been assigned an average recommendation of "Hold" from the twenty-two ratings firms that are covering the firm, MarketBeat Ratings reports. Four analysts have rated the stock with a sell recommendation, nine have issued a hold recommendation and nine have assigned a buy recommendation to the company. The average 12-month target price among analysts that have issued ratings on the stock in the last year is $49.5550.

A number of research analysts have recently commented on the stock. Zacks Research raised shares of Southwest Airlines from a "strong sell" rating to a "hold" rating in a research report on Thursday, June 25th. Jefferies Financial Group boosted their price target on Southwest Airlines from $44.00 to $50.00 and gave the company a "hold" rating in a research note on Wednesday, July 1st. TD Cowen raised their price objective on Southwest Airlines from $47.00 to $53.00 and gave the stock a "buy" rating in a research report on Thursday, July 2nd. The Goldman Sachs Group lifted their price objective on Southwest Airlines from $30.00 to $35.00 and gave the stock a "sell" rating in a report on Thursday, July 2nd. Finally, JPMorgan Chase & Co. lowered their price objective on Southwest Airlines from $60.00 to $59.00 and set an "overweight" rating on the stock in a research report on Friday, July 24th.

Hedge Funds Weigh In On Southwest Airlines

A number of hedge funds have recently made changes to their positions in LUV. Franklin Resources Inc. boosted its position in shares of Southwest Airlines by 7.0% during the 4th quarter. Franklin Resources Inc. now owns 40,200,530 shares of the airline's stock valued at $1,661,488,000 after acquiring an additional 2,626,853 shares in the last quarter. Invesco Ltd. raised its position in Southwest Airlines by 9.2% in the third quarter. Invesco Ltd. now owns 6,837,197 shares of the airline's stock worth $218,175,000 after purchasing an additional 577,326 shares in the last quarter. Morgan Stanley lifted its stake in Southwest Airlines by 4.1% during the fourth quarter. Morgan Stanley now owns 6,228,475 shares of the airline's stock worth $257,423,000 after purchasing an additional 244,891 shares during the period. Dimensional Fund Advisors LP lifted its stake in Southwest Airlines by 2.1% during the first quarter. Dimensional Fund Advisors LP now owns 5,763,154 shares of the airline's stock worth $216,472,000 after purchasing an additional 117,833 shares during the period. Finally, Norges Bank acquired a new stake in Southwest Airlines during the fourth quarter valued at approximately $172,038,000. Institutional investors and hedge funds own 80.82% of the company's stock.

Southwest Airlines Trading Down 4.2%

Shares of Southwest Airlines stock opened at $44.36 on Thursday. The company's fifty day simple moving average is $46.43 and its 200-day simple moving average is $44.36. The company has a market cap of $21.70 billion, a price-to-earnings ratio of 27.21, a PEG ratio of 0.40 and a beta of 1.12. The company has a current ratio of 0.49, a quick ratio of 0.42 and a debt-to-equity ratio of 0.54. Southwest Airlines has a 1 year low of $28.98 and a 1 year high of $55.11.

Southwest Airlines (NYSE:LUV - Get Free Report) last released its earnings results on Wednesday, July 22nd. The airline reported $0.94 EPS for the quarter, beating the consensus estimate of $0.52 by $0.42. Southwest Airlines had a net margin of 2.78% and a return on equity of 14.15%. The firm had revenue of $8.72 billion during the quarter, compared to analysts' expectations of $8.58 billion. During the same period in the prior year, the company earned $0.43 EPS. The business's quarterly revenue was up 16.4% compared to the same quarter last year. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. As a group, sell-side analysts expect that Southwest Airlines will post 3.52 EPS for the current year.

Southwest Airlines Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, July 2nd. Shareholders of record on Thursday, June 11th were paid a dividend of $0.18 per share. The ex-dividend date was Thursday, June 11th. This represents a $0.72 dividend on an annualized basis and a yield of 1.6%. Southwest Airlines's payout ratio is currently 44.17%.

About Southwest Airlines

Southwest Airlines Co is a U.S.-based low-cost carrier that operates a point-to-point domestic and near-international airline network. Headquartered in Dallas, Texas, the company primarily flies Boeing 737 aircraft and offers no-frills, single-class service designed to keep fares competitive. Southwest's operating model emphasizes high aircraft utilization, quick turnaround times and an open seating policy, allowing customers to board and select seats on a first-come, first-served basis.

Founded in 1967 by Herb Kelleher and Rollin King as Air Southwest Company, Southwest began commercial service in 1971, initially connecting Dallas, Houston and San Antonio.

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